General Assessment of the Current Situation of Public Investment Capital Management at the Ministry of Health in the Period 2016

standards along with the annual State budget settlement. However, in order for the National Assembly to easily appraise these settlement figures, the National Assembly Committees, especially the Finance and Budget Committee, must have had a written assessment; the State Audit Office must have an audit report and a report on the audit results of the Ministry of Health's annual State budget management and use. In fact, in recent years, the National Assembly has received all the above reports before discussing and approving the previous year's State budget settlement report. The most common point that the National Assembly has noticed is that the Government, the National Assembly Committees, and the State Audit Office basically support the proposed figures in the final report submitted by the Ministry of Health; the assessment comments are mainly based on comparisons between implementation and estimates and actual fluctuation trends between years, and there are no assessment comments related to macroeconomic variables from the Ministry of Health's public investment capital management results. Meanwhile, the PEFA tool has been researched and applied to health since 2005 and has also been institutionalized in the State Budget Law 2015.

2.3. GENERAL ASSESSMENT OF THE CURRENT STATUS OF PUBLIC INVESTMENT CAPITAL MANAGEMENT AT THE MINISTRY OF HEALTH IN THE PERIOD 2016 - 2020

2.3.1. Achievements

Firstly , actively researched, implemented and directed affiliated units to coordinate to establish a medium-term public investment plan for the period 2016 - 2020 to submit to competent state agencies for synthesis, approval and allocation in accordance with the order and procedures prescribed by the Law on Public Investment.

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Second, there is a strategy in using public investment capital to build and develop medical examination and treatment facilities between levels that are capable of connecting and supporting each other in the process of providing services towards meeting the increasing needs of consumers. Decision 774/QD-BYT dated March 11, 2013 of the Minister of Health on approving the Satellite Hospital Project for the period 2013 - 2020 is one of the clearest evidences of the strategic use of public investment capital to serve the development of the health sector.

A core hospital is a higher-level hospital with sufficient capacity, assigned the task of building and developing a network of satellite hospitals to help lower-level hospitals improve the quality of medical examination and treatment.

Satellite hospitals are provincial or district hospitals with many patients.

A satellite unit is a department or center of a provincial or district hospital selected by a nuclear hospital to sponsor, support training, transfer technology, and provide consultation to improve the organizational structure, human resources, facilities, equipment, capacity, and ability to provide medical examination and treatment services according to the nuclear hospital model.

To date, the Ministry of Health has invested in and established a satellite hospital system including 14 core hospitals, 45 satellite hospitals, and 68 satellite units. This system operates to achieve the goals set by the Ministry of Health.

Third , the decentralization of the management of public investment capital in the sector has initially demonstrated the thorough understanding of the provisions of the 2014 Construction Law and the direction of specialization. For example, in 2014, the YTTĐ Project Management Board was established and assigned to this Board as the investor of the project to build the second facility of Bach Mai Hospital and the second facility of Viet Duc Hospital in Phu Ly City, Ha Nam Province with a total investment of nearly 10,000 billion VND. In 2016, the YTTĐ Project Management Board was established and assigned to this Board “… as the investor of a number of medical construction projects of the Ministry of Health when assigned by the Minister

…” [17].

Fourth, capital planning of units in the whole industry has gradually improved.

Heads of units using the State budget in the health sector have clearly recognized the importance of planning capital investment in the unit as well as the close relationship between the unit's capital investment plan and the capital investment plan of the entire sector and, more broadly, the whole country. Instead of directing capital planning in a perfunctory manner as is often done, heads of each unit using the State budget understand that: any proposal for capital planning without basis will be eliminated.

During the review and synthesis process, it is necessary to integrate it into the national and sectoral investment plan. Therefore, each investor unit that wants to be funded according to the plan must first do a good job of planning the investment capital in accordance with the current regulations of the State budget and investment law.

Fifth , the organization of capital implementation of the investment plan has been proactive from the Ministry in charge to the investor units to disburse the investment capital through the progress and forms of organizing bidding, selecting and signing contracts for consultancy and contracting, and the project has been implemented quite promptly and basically in accordance with the provisions of law. Reviewing and deciding on provisional capital or payment allocation for the value of completed volume ensures compliance with the provisions of law on investment capital allocation and payment. Based on actual reports compiled from investors and functional Departments, the Minister of Health has directed the timely adjustment of investment capital between projects. Thereby, the situation of "dead capital" has been minimized within a certain period of time. The initiative of the Ministry of Health to propose transferring allocated, unused investment capital to the following year has always been unanimously considered and approved by functional Ministries and the Government. Therefore, project implementation activities in the whole sector are often carried out continuously. In addition, the difficulties of investors in the management and use of public investment capital are often reported to the Ministry's leaders and requested for direction and resolution. Within the scope of his authority, the Minister of Health, after consulting with the functional Departments, always gives timely and appropriate instructions for resolution.

Sixth , inspection, monitoring, and evaluation have been initially implemented. In 2018, with the approval of the Ministry of Health's leadership, the Department of Medical Equipment and Construction in coordination with the Ministry's Office developed a program to inspect and supervise the quality of construction works at affiliated public service units according to the provisions of Decree 46/2015/ND-CP of the Government on quality management.

quantity of works to check and evaluate the quality and progress of all construction investment projects. By November 2018, the working group had inspected the implementation status, directly resolved and removed obstacles in construction investment work at 07 units and reported the results to the Ministry's leaders. [62]

Seventh , the procedures and order for preparing settlement records for completed works and items of works; preparing State financial reports and annual State budget reports have basically been fully implemented by the investor units; the functional departments and leaders of the Ministry have also appraised, approved settlements and synthesized data for the whole sector to prepare and promptly send to the Ministry of Finance, the Ministry of Planning and Investment and report to the Government.

2.3.2. Limitations and causes

2.3.2.1. Limitations

Firstly , the decentralized model of managing public investment capital within the authority of the Ministry of Health is not comprehensive and not synchronous. Besides the YTTĐ Project Management Board and the YACTYT Project Management Board, there are many other investor units which are SNYT units under the Ministry, such as: the project to renovate and upgrade K Hospital, facilities I and II; the project to renovate and upgrade Hai Duong College of Pharmacy; the project of the pre-clinical practice area of Da Nang University of Medical Technology and Pharmacy; ... At that time, each SNYT unit assigned to be the investor must establish a Project Management Team of the investor and hire a unit to delegate project management to perform tasks in accordance with the provisions of the law on public investment. This is indeed a huge challenge for the Project Management Teams of the Investor which are established and only to manage a separate project like this. While the Construction Law allows the establishment of “… Regional Construction Investment Project Management Boards to manage a number of projects in the same field, construction route or in the same area .” [50, Article 63, Clause 1] Through this, the professionalism of the Investment Project Management Boards in the medical sector is enhanced and the efficiency of investment capital management for healthcare is enhanced.

Second, the bases used to calculate and determine the capital needs in cash for the medium-term and annual investment plan indicators are both incomplete and inconsistent. The establishment of the budget for machinery and equipment costs in projects is often determined only according to a general package, without explanation according to basic indicators, such as: name of machinery and equipment; quantity; unit price; total amount; ... The most typical example is the machinery and equipment spending plan of Bach Mai Hospital, Facility 2: 2,100,000 million VND; of Viet Duc Hospital, Facility 2: 2,100,000 million VND. However, those plan figures are still reviewed and compiled into the investment plan of the entire sector and the national medium-term investment plan. Thus, the error is not only internal to the health sector but also related to the functional agencies of the Government and higher; Because in the principles of allocating capital for medium-term and annual investment plans for programs and projects, it is stipulated that " compliance with the principles, criteria and capital allocation norms decided by competent authorities " [49].

Is the process of making the medium-term and annual capital investment plan of the Ministry of Health based on the capital allocation norms for machinery and equipment of each program and project? If so, how is that allocation norm developed? These types of questions should always be the default questions in the process of appraising the capital investment plan of programs and projects at competent state agencies. And of course, the reviewer must always have available explanatory options for each of these default questions.

Third , the method of planning medium-term and annual capital investment still lacks connection between "input" resources; and also lacks connection between "input" and "output". The lack of connection between "input" factors is most typical in the two key projects built in Phu Ly, Ha Nam province, which shows that the estimated expenditure for machinery and equipment has been approved, but the specific design and configuration of those machinery and equipment as of August 18, 2020 "The Project Management Board and the two hospitals are in the process of reviewing and agreeing on the list, number

quantity, configuration, technical features of the equipment to submit to the Ministry of Health for approval of the medical equipment bidding plan. ” [21]. In addition, the lack of connection between the “input” factors mainly comes from the lack of financial resources to ensure each project; while financial resources are always the decisive resource for medical project investment ideas. Looking back at the proposals for health investment projects, almost 100% of the project proposals state the financial source as “State budget”; while it is not possible to know how much the State budget, directly the Central Government, can provide to the health sector in the medium term and for the planning year?

The lack of connection between “input” and “output” is the most common mistake in the Ministry of Health’s medium-term and annual capital planning; because 100% of proposed investment projects do not have a forecast of the demand of the healthcare service market related to the expected investment results; there is no forecast of the price and the ability of consumers to accept the price of healthcare services.

The Ministry of Health has not proactively published full information, provided and updated on the list, configuration, and unit price of medical equipment that has been strictly censored; has been compared with information from medical equipment manufacturers in related countries; has been compared with import information from the General Department of Customs, from the Ministry of Finance to provide accurate information on the list of configurations, prices, and current manufacturers to provide to units and departments that need to pay attention to making a list of configurations, estimates for projects, as well as inviting bids, bidding, and signing contracts to implement projects. This has led to serious violations in investment projects.

Fourth , there is no consistency in the way construction contracts are applied from the signing stage to the contract implementation process; causing many difficulties in the process of disbursement, acceptance and proposal for payment of investment capital. There are contracts whose names at first glance are quite similar to the EPC form; but if you look closely, they are not EPC, because they are not a total design contract and not a contract for equipment procurement but only a contract for machine installation.

equipment. Therefore, when problems arise during the construction investment process, it is very difficult to comply with the provisions of the law on the responsibilities and powers of each party in the construction contract. As a result, the solution is often to submit for opinions from the Ministry in charge and the relevant Ministries to direct the resolution. This is one of the reasons leading to slow construction progress, slow disbursement and payment of investment capital for the health sector in recent times.

Fifth , the final settlement of completed projects is still delayed. This phenomenon occurs more commonly in projects where the beneficiary unit of the project investment results is assigned the role of investor. The Ministry of Health - directly the Department of Planning and Finance - has regularly urged this, but the administrative effect from higher levels on these investor units is almost insignificant; while sanctions to contribute to regulating these types of behaviors have not been stipulated in legal documents.

The records, procedures, and settlement order of completed projects also reveal many limitations, such as: the accuracy of completed volume is not high; incorrect application of construction unit prices; incorrect application of currency exchange rates; incorrect accounting of financial sources; incorrect allocation of costs and to the wrong subjects; ... also contributing significantly to hindering the disbursement and payment of public investment capital in the health sector.

Sixth , the inspection by the heads of the investment units of the Project Management Board and the contractors has not been carried out regularly; when detecting any irregularities, they are not firmly handled in accordance with the provisions of law. The inspection and examination activities of the investment management agencies of the investment units are also not regular and lack determination in handling irregularities in investment capital management at the affiliated units. The process of appraisal and synthesis of completed project settlement and annual settlement from the investment units of the management agencies is still heavily formalistic, in order to promptly have reports to send to the relevant Ministries for management.

The State Audit Office and the Government. This has created a lack of responsibility in the management of public investment capital for the officials, civil servants and public employees directly assigned to carry out this task. The violations in the management of public investment capital of the central health sector have been clearly stated by the State Audit Office in the periodic "Conclusions of the State Audit Office" but still lack the direction of the Ministry's leaders to thoroughly overcome this phenomenon.

2.3.2.2. Causes of limitations

Firstly , the design of the organizational model of the project management system and the decentralization of management of these projects among the departments in the project management system of the Ministry of Health have not been thoroughly and comprehensively studied. Before October 16, 2018, the Ministry of Health did not have any specific documents regulating the management of investment projects in construction of works and medical equipment, so the decentralization to the affiliated SNYT units to be investors in projects within the scope of the project management of the Ministry of Health was spread out; even beyond the provisions of the current law on construction and construction management. Specifically:

Construction Law No. 50/2014/QH13 passed by the 13th National Assembly on June 18, 2014, effective from January 1, 2015, only allows the investment decision maker to decide to apply one of the following forms of project management organization: (i) Specialized construction investment project management board; (ii) Regional construction investment project management board; (iii) Project management board for construction investment of a project (with conditions); (iv) The investor uses a subordinate professional apparatus with sufficient capacity [50]. Meanwhile, the Director of the Investment Project Management Board and those working in this Board must meet very strict professional conditions [26]. Therefore, when the Investment Project Management Board is only made up of people taken from the investor unit with the scale of a SNYT unit under the Ministry of Health, it is difficult to meet the professional conditions as prescribed by law; Or even if the nominal conditions are met, actual capacity is also a matter of concern.

Regarding scope, the law on investment only allows " The person deciding on investment to decide on the form of project management organization suitable to management requirements and

General Assessment of the Current Situation of Public Investment Capital Management at the Ministry of Health in the Period 2016 - 2020

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